Kenvue (KVUE) - 2025 Q1 - Quarterly Results

Financial Performance - Q1 2024 net sales increased by 1.1% to $3.9 billion, with organic growth of 1.9%[1][2] - Net sales for the fiscal three months ended March 31, 2024, were $3,894 million, a 1.1% increase from $3,852 million in the same period last year[36] - Net sales for the fiscal three months ended April 2, 2023, were $3,852 million, with a gross profit of $2,125 million and a gross profit margin of 55.2%[44] - Organic growth for total net sales was 1.9%, with Self Care segment showing 4.2% growth, while Skin Health and Beauty declined by 4.5%[37][38][39] - Essential Health segment achieved organic growth of 4.9%, driven by strong performance in Oral Care[40] Earnings and Profitability - Diluted earnings per share for Q1 2024 were $0.15, while adjusted diluted earnings per share were $0.28[1][7] - Gross profit margin for Q1 2024 was 57.6%, up from 55.2% in the prior year, with adjusted gross profit margin at 60.2%[4] - Net income for the quarter was $296 million, down from $469 million year-over-year, resulting in a diluted net income per share of $0.15[36] - Adjusted operating income for the quarter was $855 million, up from $819 million in the previous year, reflecting a margin of 22.0%[41][42] - The company reported a significant increase in adjusted EBITDA to $933 million, with an EBITDA margin of 24.0%[42] Future Projections - Kenvue expects full year 2024 net sales growth to be in the range of 1.0% to 3.0%, with organic growth projected at 2.0% to 4.0%[9][10] - For full year 2024, Kenvue expects adjusted diluted earnings per share to be in the range of $1.10 to $1.20, assuming a diluted weighted average share count of 1.92 billion[11][12] - Reported interest expense for full year 2024 is expected to be approximately $400 million[13] - The effective tax rate for full year 2024 is projected to be between 26.5% to 27.5%, with an adjusted effective tax rate between 25.5% to 26.5%[14] Cost Management and Workforce - The company anticipates a net reduction of approximately 4% of its global workforce, aiming for annualized pre-tax gross cost savings of about $350 million by 2026[8] - The company incurred restructuring expenses of $41 million during the quarter as part of its strategic initiatives[36] Cash Flow and Debt - Cash and cash equivalents as of March 31, 2024, were $1.2 billion, while total debt stood at $8.6 billion, resulting in a net debt of $7.4 billion[49] - Free cash flow for the fiscal three months ended April 2, 2023, was reported at $0.7 billion[46] Taxation - The adjusted effective tax rate for the fiscal year 2024 is forecasted to be between 25.5% and 26.5%[46] - The effective tax rate for the fiscal three months ended April 2, 2023, was 23.0%, with adjustments leading to an adjusted effective tax rate of 20.4%[46] Challenges - Kenvue continues to face challenges including intellectual property protections and potential disruptions from geopolitical events[33]